Many people struggle with consumer debt.
Their credit cards always have a balance. Their bank account is always low. They always feel like they have more bills than they can manage.
We understand that everyone gets hit with bad luck from time to time. But a long history of consumer debt might be indicative of bad habit patterns when it comes to managing money. Unfortunately, debt often starts with bad habits that form over time.
If you haven’t evaluated your financial habits in a while, it’s time to take a look at your actions and then take steps to find a solution.
You should be fully aware of how much is in your bank account at all times. This will help you to avoid any overdraft fees, and it will also tell you exactly how much you have to spend.
Along the same lines, you should be aware of your outstanding debt. If you don’t know the totals, or if you’ve been ignoring the bills that keep piling up, you’re not helping yourself at all.
Solution: Get on top of your finances! Open all your bills as soon as you receive them, make a list of your outstanding debt, and look at your bank account on a daily basis. Set a reminder so you don’t forget to check-in.
If you have balances on loans or credit cards, you should be paying more than the minimum due. If your balance is high, your money might be going more toward interest than principal, which is never a good place to be.
Solution: Try putting together a budget so you know exactly where you’re allocating your money every month. If you have any income left over after accounting for expenses, then throw that at your debt.
You should be treating your credit card like a debit card. You wouldn’t swipe your debit card for a purchase over the amount in your bank account, right? Don’t do the same for credit.
Just because you can “pay it back” at a later date doesn’t mean you should do so. By charging a larger purchase, and then paying it back over the course of a year, you’re going to be spending more than the original amount due to interest.
Solution: Only charge what you can afford to buy with the money in your bank account.
Along the same lines as #1, you want to be aware of your spending. If you’re charging everything without thinking about if you can actually afford it, you’re making a mistake. This will land you in a neverending cycle of debt.
Solution: Track your spending. This might seem tedious, but it’s vital you have a full picture of your financial situation. You might be surprised to find what you’re spending in certain areas.
Finally, stay hopeful and optimistic. You’ll beat your debt eventually — and every passing day gets you one step closer to debt freedom. Stay on-track and keep your ultimate goals in mind.
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